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On the Internet, "the best is yet to come," says Amazon.com
( 2002-01-26 14:04 ) (7 )

The best in online commerce is yet to come, promises Jeff Bezos, the top dog at leading e-tailer Amazon.com, whose vision differs sharply with those who trumpeted the failure of the new economy in the late 1990s.

The company, which began six years ago as an online bookstore, has since expanded to carry everything from toys to tools to toiletries. And after 23 consecutive quarters of hemorrhaging money, the company, finally, announced a profit for the fourth quarter of 2001.

Amazon's popularity and, finally, financial solvency, runs counter to the gloomy predictions of naysayers who performed last rites for electronic commerce after the stunning failures of dot-com after dot-com over the course of 2000.

"In 1999, people had expectations that were too high about e-commerce. Then in 2000, people said the Internet is dead," Bezos told reporters.

"Of course, neither of those extreme points of view is correct. It's still the very beginning of e-commerce," said Time magazine's person of the year for 1999.

But even Bezos, whose enthusiasm was infectious and prompted massive infusions of cash from investors seemingly unconcerned about profits in the first years of Amazon.com's existence, injects a cautionary note to dampen his own online euphoria.

"I wouldn't expect 1999 to happen again because that was irrational exuberance," Bezos said, alluding to a notorious statement made by Federal Reserve chairman Alan Greenspan to describe the soaring flight of stocks listed on the tech-heavy Nasdaq index.

"What you'll see is methodical deliberate progress towards things that really serve customers well."

Bezos blamed the failure of most would-be online giants in the late 1990s on the lack of attention paid to customer service.

"Most of the companies that disappeared were not focused on genuinely creating a great customer experience," he said.

While currently online retailing accounts for only one percent of total commerce, Bezos is optimistic that, within 10 years, 15 percent of all buying and selling will be done over the Internet.

Where Amazon.com will fit in -- perhaps as a gigantic discount supermarket offering food, cars and clothing -- Bezos isn't saying.

He did, however, detail the company's relentless pursuit of clients by adding new products to its shelves and developing partnerships with traditional brick and mortar businesses in the United States and Europe.

Already, toyseller Toys 'R' Us and discount chain Target sell their goods under the Amazon.com umbrella, while electronics retailer Circuit City and British booksellers Waterstones are involved in joint Amazon.com ventures.

Internationally, Amazon operates websites in France, Germany, Britain and Japan, but so far has no concrete plans to expand its reach further.

"Over time, not necessarily this year but over time, we may add more countries," Bezos said, though he noted that the five countries where Amazon currently operates generate 90 percent of the world's e-commerce.

As far as expanding into Spain or Italy, "it's not a question of if, it's just a question of when," he added.

Nearly one-quarter of Amazon.com's sales are generated in its international markets, bringing in some 660 million of the company's 3.12 billion-dollar revenues for 2001.

But like everything else online, it will take time for those markets to become more lucrative, Bezos said.

"If you go back and you are standing at Kitty Hawk and looking at the first airplane, you can't imagine the DC-9, much less the jet engine," he said.

"One day, somebody invents the jet engine. That's what happens with new industries. The best is yet to come."